>> the hallmark of the fed is they talk a lot tougher than their actions. >> what is clear is powell is very data dependent on the rate path. >> history is missing that ingredient. >> inflation is the number one thing they're aiming at right now. >> they are not going to hike enough to really slow inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: what a week, what a month, what year. for our audience worldwide, good morning. this is "bloomberg surveillance ," live on tv and radio. your equity market is -0.3% on the s&p. just through this morning, starting to fade, negative for just a moment. lisa: raising a question of why earnings don't matter as much as people thought they would. apple having a fantastic forecast, and that has not been

enough to believe the results or support the whole index, so where the fundamentals fit into this picture? jonathan: the equity market, the nasdaq still unchanged. kailey: the question is how long that is going to last because we have seen such choppy trading throughout the week. you can fit three to four days of price action into one intraday period. volatility abounds. if apple isn't enough to stabilize things, what is? jonathan: we had a year's worth already. breaking out on tens, breaking out again on twos. euro-dollar is negative for a fifth straight session. lisa: a really interesting point by kit juckes socgen. he said for now, we believe the dollar story has some more likes to go, but out a certain point, we are going to price and those five rate hike, press of the that action, and get the rollover.

you are also seeing a we getting euro region. the those things together and it is hard to see how the dollar is going to we can. jonathan: barclays just published, "we might be near the point of maximum hawkish in us and policy mistakes fear in our view, combined with a cleaner positioning from fast systematic money. this could help equities find a foot." that is the bet right now. lisa: this is what i have been thinking about. what happens if we get serious we getting in the economic data? does that actually signal a buying opportunity for equities, or does that signal a different type of wood us as people tried to -- a different type of weakness? that is not necessarily positive for equities. jonathan: mike wilson of morgan stanley said slowing growth is going to take over from fears of whatever the fed might do. that is where they are focused. kailey: winter is here was that

had love that note, and it does feel like winter has may become for this equity market. to the point you are speaking to about the signs underneath the surface that maybe we found some kind of a bottom here, michael harden at bank of america was .2 fund flows, 7 billion dollars coming into equity funds. he sees zero signs of capitulation. if it hasn't happened yet, when is it coming? jonathan: have you noticed that every time there is a snowstorm, tk does not come into work? [laughter] lisa: is bentley sometimes gets delayed. jonathan: he's talked about the weather not hurting him, and then we get a bit of snow, and he's off. we love each other. love you, tom. futures down 0.3% on the s&p. on the nasdaq, basically unchanged. in the fx market, euro-dollar negative five straight sessions. just about holding onto 1.11 right now.

we are -0.1% there. tens, 1.84% on the 10-year gilts. lisa: i am watching tens after we might get what would be the most important economic data of the week. at 8:30, we get u.s. eci, the employment cost index for the fourth quarter. this is what triggered the shift in the fed that we saw from chair powell at the end of the year. we are also getting the key inflation metrics the fed looks at, the core pce, which surged to the highest level in decades and is expected to climb from there. how much does this edify what we are seeing in prices for the market, or have we already gotten to peak hawkish in us? 10:00 a.m., u.s. university of michigan consumer sentiment survey. not necessarily winter and doom and gloom. there's definitely an economic perspective, but the issue is how much are people losing confidence in the economy as a result of the higher prices.

real spending also it going to decline. u.s. baker hughes rig count coming out. it has not recovered to the levels it was pre-pandemic, and it is a far cry to before that oil crash. how much does this serve as the ultimate production mechanism that fills in the gaps as opec+ remains a wildcard? this really is the question as we see oil prices rise to the highest levels going back at when he 14 -- back to 2014. jonathan: do you remember playing rig count guesses? that is what that remind me of. i'm just telling you what i am thinking. lisa: the fact that it is not even on people's radar shows the discipline that people are talking about in the shale patch has led to a discounting of this marginal producer. is that fair, or could this come back online at a time when the

investment just isn't there in the same kind of way? jonathan: really important. thank you. jean boivin joining us now, of blackrock, global head of investment. why is that important? jean: i think it is pretty crucial and important. we have seen, after stopping the economy for the virus, a restart. we have been in that process the last few quarters. it is not our usual recovery. this is not guided by the consumers, investment sentiment, and animal spirits. it is really about going back to the activity, turning on companies, turning on life. that can happen very quickly. point number two is it is a lot easier to restart demand then it

is to restart supply, so that really is a mismatch. that is where inflation is coming from, and that is very indifferent from inflation we have seen. so it is pretty crucial. kailey: jon was focused in on the research line. i focused on that monetary policy cannot stabilize inflation and growth. because it is laser focused on inflation, is it at risk of hyper tightening into weakness, and therefore we are worried about a recession down the line? jean: just to be clear, is a restart and recovery. it is really about lifting constraints. on that front, it makes complete sense to try to start normalizing policy, and that is in line with what they are starting to do, which i think

makes complete sense. i think where it becomes concerning is when this is sold as an attempt to tame inflation. that is a completely different thing because this inflation is really shaped by supply. we have not seen that kind of environment. in an environment like this, you have a choice. you need to just eyes -- need to decide whether you stabilize inflation or growth, and if you go hard for inflation, it is going to be very costly to tame inflation. so this choice is a lot starker, and not warranted, i think, at this stage. lisa: do you think that is where the fed is going, that we will see discussion later this year? jean: i don't think that is where we are going. if we go by the cumulative rate of hikes until putting 24, it is still very muted.

so that is in line with what you should be doing with a restart, lift the foot of the accelerator, but not hit the brake. one concern is they are not expose italy are actively trading in the way we are talking about, and the market has certainly primed to do that. i think this is where we can get for a while a pretty bumpy ride, but i think ultimately, even if they were to try to do a slamming the brakes, i think they would be persuaded pretty quickly. jonathan: are you more accountable right now looking outside the u.s.? i've heard some any concerns from you in the last five minutes or so. are you more comfortable looking outside the u.s.? jean: concerns are really near term, so if you take a trading perspective, from a longer-term investment perspective, i think

it is a bumpy ride, but the fundamentals are not really changed. i think it is remarkable and we should all remind ourselves of that, the people now are expecting him like five hikes. it took only a couple of months to get there, and what changed that? it is really an interpretation of what the fed was saying. so i think that interpretation can change, and ultimately, this is still constructive. it is constructive even in the u.s. we think emerging markets continue to be an interesting area, and interesting space, and it is useful to look at this area, but within the dm world, no strong preferences for europe, japan, or u.s. at this stage. i think it is a restart across the globe. jonathan: jean boivin there of

blackrock investment institute. the labor market was stronger. inflation was higher. he is saying the labor market is stronger now versus then. that is the issue i think some people have. is the labor market stronger now versus then? the labor market might be tight, but is it strong? that word raises some questions. lisa: especially looking at participation rate. if we are not seeing the participation rate return to prepend him at levels, can we consider this strength? jonathan: we are down almost 0.1%. yields are higher. on fives, on tends, and euro-dollar negative once again. on radio, on tv, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. russian foreign minister sergei lavrov says he saw some rational

elements in the u.s. response to moscow's security demands, but said key points were ignored. president biden warned ukrainian president volodymyr zelensky that a russian invasion could come next month. president biden says he will fill his promise to not make the first black woman to the supreme court. he says he will announce his choice by the end of february, just as justice breyer told the president formally he will retire in june or july, assuming a successor has been confirmed. north korea launched four missiles this week, including two long-range cruise missiles that could good -- that could give the kid ability to hit almost all of japan. they have wrapped up weapons testing in an attempt to signal unhappiness with the u.s. over comic sanctions. in london, and acrimonious court battle over claims of false accounting has come to an end. the founder of autonomy

corporation mike lynch -- accused of inflating the value prior to hp's $11 billion takeover in 2011. he faces four charges in the u.s. shares of apple moving higher today. fiscal fourth quarter sales and profits beat expectations, seen as a victory over the supply chain crunch. and while, apple forecast sales would grow by a double-digit percentage in the march quarter. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ >> the big choice putin faces, does he want to go to war with ukraine and may be acquire a large part of the country, or does he want big concessions from the u.s. and nato? if he goes to war, he probably won't get those concessions. he will antagonize and unify the western alliance. jonathan: what will the outcome be? that was a senior fellow at the council of foreign relations. from new york city, with lisa upper what's -- with lisa abramowicz and kailey leinz, i'm jonathan ferro. on the week, we are down 1.6%.

on the year, down by more than 9%. on the nasdaq 100, down about 3%. we expected to see a pop right here. now we are negative. even with the move on apple. some are markable moves here. yields higher on tends by four or five basis points. this curve has been flatter through much of this year, and the banks and the equity market now negative for 2022. lisa: you have seen real yields continued to climb as inflation expectations over the longer term actually come down, even as you see yields rise. to me, this might be the real story underpinning risk assets and certainly underpinning the weakness we continue to see. jonathan: geopolitics a big picture of the week -- a big feature of the week? lisa: not at all. perhaps for gas, but this wasn't the dominant story. i am wondering whether it will become one or if people are basically looking at the simmering issue is a possible tail risk. jonathan: let's talk to annmarie hordern down in d.c., our

washington correspondent. can you walk us through it? annmarie: let's start with the call yesterday between president biden and his counterpart, ukrainian valletta mayor zelensky -- ukrainian valletta mayor zelensky -- ukrainian the low to mid zelensky. they could strike soon, but we heard pretty categorically from the white house that this was a false report. president biden said there is a distinct possibility that the russians could invade ukraine in february. this is something the white house has said publicly. he could invade february. so anything more on that reporting it is completely false. maria tadeo has told me a call started at 10:46 french time

between president macron and president putin, and it seems like they are still on that call. kailey: that is only a few weeks, and yet they are still saying we want to push for a diplomatic resolution. are they running out of time? annmarie: diplomacy is certainly what they want to push for first, and that is what we see the administration doing, and we should note on the russian side, we did hear from sergei lavrov today. there was a bit of a calmer tone coming from the kremlin. he said there was a kernel of rationality and those written agreements, and said finally, washington is taking seriously russian demands that they've had for years, which is secondary security concerns, not the ones we know are categorically not going to get through in terms of a vote on nato and pulling back forces from the former soviet states. the secondary concerns have to do with missile deployment, as well as military exercises. this potentially opens of a bigger pass for diplomacy and

potentially, as the guest was just saying, if president vladimir putin wants concessions from nato, this would be his offramp. but we have heard from him since before christmas. we do not where he stands on ukraine. lisa: how much has this geopolitical tension taken the wind out of the sails in terms of president biden's agenda? annmarie: this is what they are focusing on every day. this is what the questions are constantly about. what is the update when you talk to the pentagon? they have briefings. yesterday we are talking about how there's now more than 100,000 troops, which matches what the ukrainian defense minister said yesterday. you see it is a lot of energy and political space and capital being used towards foreign policy, so when you have the president yesterday alongside justice breyer talking about something that could cement his legacy, that is a win for the administration because the focus

in washington has been towards what is going on in eastern europe. lisa: next week we have hearings for the three nominees for the federal reserve, and inflation front and center for both the markets, as well as from a domestic political agenda. how much have we moved to a regime where senators are going to actually be encouraging a more hawkish tilt, fed governors and fed members are going to be eager to raise rates and tighten policy? annmarie: this is the decision that faced lael brainard and jay powell. the question is going to be inflation because inflation is hurting lawmakers and their constituents. they are gearing up for midterms. i think a lot of the questions will be political in the sense that they want to show that they are taking consumers and their voter issues to heart, but there's also a lot of concern

right now when you look at those fed hearings coming up next week about sarah bloom raskin, given the fact that she had this opinion piece about why is the federal reserve still helping fossil fuel companies. there's a lot of individuals who are going to take aim at her and her climate policies of the past. jonathan: is d.c. busy yet, and your experience? annmarie: it is a bit mixed, and the sense that there is definitely less people around, but it is starting to get a little bit more buzzy. i say this because if you asked me 24 hours ago, i would say no, but i went out to dinner last night and it was hard to get a table, so i think it is slowly changing. but already, i find d.c. a little more sleepy than new york , but i guess you can come hang out here and give me your take. jonathan: i will pay you a visit soon. thank you. driving down park avenue, really busy through midtown in a way i have not seen for a while. maybe things are getting busier

again. lisa: it feels like that. the number of cases have come down dramatically, so perhaps people are getting there isn't shopping on. jonathan: that is what it is -- their event shopping on. jonathan: that is what it is, revenge shopping? [laughter] lisa: i've noticed it as well, people getting a lot more crowded. jonathan: just to promote some guests earlier, we will be catching up with robert kronenberg. looking forward to that, alongside mohamed el-erian. that is going to be a really important conversation on emerging markets. don't miss that at around 9:30 eastern time. to run through the price action of the moment, down 33 on the s&p. down by almost 70, always 0.5%. jonathan: equities down, yields

up to 1.8355%. with lisa abramowicz and kailey leinz, i'm jonathan ferro. for our audience worldwide, on tv and radio, this is bloomberg. ♪

♪ jonathan: given those apple numbers after the close yesterday, this is probably not the move you were looking for. we are down about zero point 3% on the nasdaq. the s&p we are they get a 0.3%. the bigger waiting on the nasdaq 100, 12% of it. apple can't even get you again this morning on the nasdaq 100. the equity story softer, even worse for the nasdaq. on the year, the s&p 500 down 9% and some. let's take a look at this together. your two-year yield, 1.2181%. we had a move of almost 50 basis points on the year so far in four weeks. on tens, higher by four basis points at 1.8373%. we just keep baking in more hikes. now we are talking about five

over at wells fargo. this year, including some balance sheet reduction coming. in the middle of the year, maybe july for the likes of wells, even earlier for others. how far can you push that, and for how long can this ecb said it out. -- ecb sit it out? on the session we are down by 0.1%. no drama. for five straight days, we have been in negative territory for euro-dollar. the federal reserve keeps pushing it. the market keeps pricing it in. for the ecb, and our survey that we conducted, they don't think the ecb makes a move until 18 months further down the road. jonathan: -- lisa: it makes sense if you look at the comic data, where germany is on the cusp of recession, and we are seeing negative growth. the ecb is chasing a very different economic picture, and that is really driving this

divergent story. jonathan: have we gotten to the point of max divergence? have we reached peak caucasus? -- peak hawkish in us -- peak hawkishness? everyone always wants to call that. lisa: it is hard to do because we don't have the economic data. you get 10 people in the room, you get tendered opinions on inflation, 10 different opinions on which data point is most important. jonathan: and 10 different opinions on how far the fed can push interest rates before things break. kailey leinz is everybody. [laughter] right now she's going to be romaine bostick. romaine: good thing, and romaine -- lisa: -- kailey: good thing, and romaine -- good thing tom and romaine both have bowties, so they are kind of the same. apple blewitt a what -- blewitt out of the water in the reports

last night, up just 3% in market trading after blowing it out on pretty much every single metric. supply chain issues really not a problem. $124 billion in sales in the quarter, and yet only rewarded with a 3% move. it shows how high the bar is in this rough environment for technology. visa beats on both the top and bottom line, 20% gain in spending on their card. it is up 3%. there are a lot of negative stories, one being robinhood. we are about a year out from the robinhood mean driven mania, and robinhood is seeing its prominence raining -- prominence waning in a big way. it is down 13% before the bell. western digital dealing with supply chain issues, down 11%. chevron, this is a really interesting one, it missed pretty much across the board on profitability. even as we are seeing higher energy prices, a lot of that has to do with reduction in the value of some of its legacy

assets. i will be asking the ceo about that later this morning. chevron down 3.2% before the bell. jonathan: thank you. tom is with us. [laughter] he's just tweeted me, "divide and family finally has a cat -- "the biden family finally has a cat." they have welcomed a file named willow. tom is doing this because he knows how i feel about cats. and if you say, do you know how much abuse you get from the cap people? i love cats. it's my new position on air. lisa: that is really honest of you. he has at home watching cat videos right now. jonathan: we both had a cement a long time on radio that we will never repeat again because we offended so money people. we love cats. anna han joins us now. your colleague chris harvey says we have seen a cathartic puke in

the equity market, now it is your job to translate what he means by that. what does he mean? anna: i think we have seen that knee-jerk reaction and we are pricing in more and more aggressive monetary tightening. now we might even have a coinciding of tightening and balance sheet reduction, and the market needs to price that in. i think that is what has been happening. jonathan: where are you looking to pick up the pieces at the moment? it smaller but similar one on the s&p 500. anna: there are parts of the growthy tech market that could still see further downside. there are still some pretty high valuations on what we like to dub story stocks, stocks the don't really have the strongest fundamentals, but have been bid up with some expectation. have they seen that rising rate environment, and is there likely a 50 basis point hike in

march? for us come the leader is going to be what can play well in the rising rate environment, but also continue to benefit from continued positive gdp growth. slowing, but positive dp growth. kailey: can we -- positive gdp growth. kailey: can we throw earnings out the window? anna: i would not throw it out the window, but it is going to be two different factors here. what has been interesting about earnings is we are starting to see margin compression in a sequential basis. we are talking about eps beats, companies being able to meet expectations, but when you look at how revenues have been growing, you are starting to see that they are suffering a little bit on that profitability, and the reward is really going to be for companies that don't just beat on the top and bottom line, but also grow that profitability. kailey: as we work our way through earnings season and we

wait for more reaction on that, do you expect volatility to tamp down? i am exhausted from this week. anna: we say that, but keep in mind, seeing the vix around the 30 is not 40, it is not 50. it is short-term volatility. what is important here is how the investor risk appetite has been. even last year, you saw there was a strong bid for risk aversion, and a high volatility style. think that is continuing, and that will persist for the next couple of months. lisa: do you think that by the debt has basically gone the way -- that by the dip has gone away, and that is no longer the strategy? anna: it is much weaker than we have seen it, especially because now looking forward, people are being more particular. it is not just equity rallies with all of this monetary

liquidity. it is a reversal of what we saw in 2021. we are going to tighten monetary policy, takeaway accommodation, so you're going to see a bit of a weaker hand. lisa: you put out a bull case and a bear case. the bull is that chair powell ends up walking back some of that while we still get growth . the bear case is higher inflation continues, as well as some concerns about how long this can last as u.s. consumers tap into their savings. what is the differential and equity performance for those two scenarios? anna: for us come our price target is 4715. that is not an overly aggressive fed. but if you see chairman powell really wrestling with inflation and grabbing inflation by the horns, but having a difficult time camping down on that. you could see much further weakness. you should see higher

volatility, more spikes. that is the kind of environment where we would look to revise down, but so far, i think that is still a tail case scenario for us. jonathan: you came in the year looking for a flat market, and 4700 was not the most bullish call. it feels more bullish now as the year progresses. great work as always. anna han of wells fargo securities. rolling over a bit, down 0.75% on the nasdaq 100, down about 1% on the s&p. some underperformance in europe. the stoxx 600 not doing so well. lvmh now negative on the day. this is a stock that opened up higher in europe by 5% and is now down by 0.5%. if you want a feel for the earnings, organic revenue, the main division, fashion and leather goods, revenue was up 42% from 2019. not from the year before, from 2019. those are unbelievable numbers, and they can't buy a rally in this equity market.

lisa: it seems as though people are trying to quickly capitalize on any rally whatsoever and get out as quickly as possible. it feels like a trading market because of the lack of certainty, and yet kailey asked, where do fundamentals factor into this? it is hard to know the answer given that we are continuing to see underperformance, even by names that are doing just fine. jonathan: trading lower in paris, don't buy more than 2% there. the benchmark and frank for it, germany down by about 2.5% -- benchmark in frankfurt, germany down by about 2.5%. kailey: it is not enough to support futures on the technology gauge this morning. it has just been an intraday volatility story over the last week. i believe we are coming off the first two days where we have seen the s&p 500 move from a 2% gain back to back, going all the way back to 2008. we are seeing price swings we have not seen since 2008 or the price but will. -- the price bubble.

i'm not sure these are periods that they would like to be compared to. jonathan: it is still positive, but only by 2.5% off the back of some really strong numbers, and going into that print, we had some really weak performance on the stock year to date. lisa: again, where does the cash flow fit into the picture, or is this going to be a tale of the lesser losers, the ones that can withstand a big downturn in other stocks of the same category, simply because they are so cash flow positive? jonathan: coming up, we will catch up with torsten slok, chief economist at apollo global management. here come the messages. "you hate cats, we all know it." [laughter] i did not say that. from new york, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta.

and the u.k., a government investigation into pandemic parties in prime mr. boris johnson's office could be stripped of key details at the request of police, conducting their own investigation. a water down probe could be helpful for johnson, starting to persuade his conservative party colleagues not to mount a leadership challenge. russia will sign -- china and russia will sign an agreement to build a research station on the moon. do countries agreed to complete basic infrastructure at 2035. it is the latest sign that the new race to go to the moon is heating up. asked month, the u.s. has scheduled a major test of its artemis program, an effort to return astronauts to the moon later this decade. the european union and the u.k. reportedly are gearing up to sanction new russian gas projects if there is an attack on ukraine, according to "the financial times." the sanctions would drastically cut financing and technology transfers to gas facilities. disappointing fourth quarter profits at chevron. the oil giant failed to take

full advantage of surging energy prices. chevron's overseas upstream business and domestic refining network fell short of the expectations. the company is especially vulnerable to gyrations in the foreign market. the makeup more than 60% of its oil and natural gas output. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> inflation when it gets embedded, when it becomes a secular like the 1970's, it had

a lot to do with psychology. we know the fed can't shorten the problem in terms of semiconductor availability. they can't shrink the number of ships sitting off the port of l.a. and long beach. but their words can sometimes change perspective down the road , so i think the jawboning aspect of what the fed does i think will continue to be important. jonathan: liz ann sonders, charles schwab chief investment strategist. trying to stay up to speed with what is happening in this market. futures are down 47 on the s&p, down more than 1%. the nasdaq 100 is down by almost 1% as well. looking at apple, just about holding onto gains. still positive, but session lows up to 15%, even with solid numbers. lisa: people saying we will be rescued by the fundamentals, and if the fund mental's couldn't rescue this name, what will? this raises concern heading into

an earnings season that might not be a strong as we saw from apple. jonathan: lvmh is down 0.9%. i'm getting a lot of messages about this. these numbers for most people were better than solid. they were great. kailey: blew past expectations. a really strong recovery in the luxury sector. yet it is not enough to see a firm reward for the shares. they started the day up 5%, but as we saw broader europe roll over, they are rolling over as well. jonathan: we are trading softer this morning. let's get to kriti gupta for her chart of the day. kriti: we have to talk about the commodity sector because we are seeing a lot of pressure in the equity market, certainly in the bond market as well, but you are not necessarily seeing that translate into the dollar, which continues to be stronger. therefore, even the face of commodities continuing to rise, that brings me to my chart of the day, which looks at the bloomberg commodities spot index, which does not just include oil and natural gas.

it also includes the likes of wheat and aluminum. in 2007, commodities hit that peak right before the 2008 crash. the next one was in 2011. a lot of that had to do with the russian crop crisis. russia and ukraine together makeup 1/4 of the world's grain exports, so this will be a key piece of the equation for pressing and a potential invasion into ukraine. that is really what is driving that next leg higher in the bloomberg commodities spot index, once again to a record high. jonathan: let's talk about crude. brent at $90 per get wti at $87. joining us now, the brilliant ellen wald, senior fellow at the atlantic council. the last time we saw crude wear rate is at the moment, you would have to go back to october 2014. the month after that come of the saudi's started the market share war. are the saudis and opec comfortable with where crude is at the moment?

ellen: i think they do believe crude is a bit high, particularly for the saudis' liking. they have been much more concerned with the comfortableness of consumers with the oil price. they would probably prefer something a bit lower than what we are seeing now, as opposed to say iraq, or even a ron, which -- or even iran, which is quite happy with prices going as high as they can go. opec is not think these prices are really due to fundamentals. they are definitely convinced that this is much more due to speculation in the market, geopolitical risk, so there is not a whole lot that they feel they can do. they are meeting next week, and it is very likely that they are just going to continue with their very gradual increases in production quotas, but remember that just because they say they are going to increase 400,000

barrels a day for next month does not mean that that oil will actually go on the market because a lot of the opec+ producers are basically tapped out at this point, and we are only going to see increases from the nations that are able to increase supply at this point. lisa: there is so much to unpack. you were talking about how they definitely seems to be a wish for oil prices to be lower by saudi arabia, and they can't do anything about it. is this because of some of the geopolitical speculation, or because of exactly what you were just talking about, that they can say they are going to ramp up production, but they won't actually be able to accomplish it based on that tapped out dynamic? ellen: i think it is both. i think there is now an awareness that even if opec+ says we are going to increase by this amount, that the actual amount on the market will be somewhat lower. i think in december, they were

only able to increase by 310,000 barrels per day. we have not gotten the january numbers yet, and we will have to see what happens in terms of the increases, but there are definitely a bunch of nations tapped out, and no one is really compensating for that. they are all very much attuned to sticking within their individual quotas. on the other hand, you've got a lot of speculation being fueled by some of the forecasts for big banks, also the energy crisis in europe, and now you've got the threat of potential sanctions for russian energy that could really through the market into a lot of chaos, so there really isn't much that opec+ can do on that end. kailey: let's talk about the threat of russian sanctions as it relates to europe. energy is not exempted from that. what are the ripple effects? ellen: this is i think really what is driving the market a bit crazy right now, especially in

terms of prices. there are no actual sanctions right now, but this potential for sanctions that the u.s. and some other europeans, there's a lot they could do to lock up the whole energy situation which is quite tight at the moment. there's the threat that if they cut russia off from the system, europe will essentially be cut off from natural gas because they won't be able to pay for it. we know the u.s. has been trying to talk to other natural gas producers to get them to increase production. it is really at this point too little, too late. if you wanted to have plans in place to essentially reorient the natural gas market, you needed to do that months and months ago. it is something the u.s. has actually done in the past, but not something you can really cobble together at the last minute and expect there not to be a massive dislocation in the

market. jonathan: thank you. ellen wald, senior fellow of the atlantic council and author of "saudi inc." up 19% year-to-date for that industry group on the s&p 500. we have seen a ton of pain, some real pain beneath the surface of that index, but there's one industry group that stands out tall and proud. it is energy equities. lisa: it has won from every perspective, investing in the recovery story as people get back to normal life, and you get the forecast for more travel. it has also benefited by the conflict we have seen with germany and russia and ukraine, and the question of where oil will come from. i keep going back to you had to prepare for this earlier, which goes to your point, germany's foreign policy. what does this say about their level of preparation? jonathan: going to be a talking point for a while. lvmh with some fantastic numbers, traded 5% higher at the open in europe. it is now down 0.6%.

apple with some really solid figures. still positive in the early trading, up 2.7%, but the nasdaq is negative even with that, down 1% on the nasdaq 100. on tv and radio, for our audience worldwide, this is bloomberg. ♪

>> the hallmark of the fed is they talk a lot tougher than their actions. >> what is clear is powell is very data dependent on the right path. >> we have not had the balance sheet and qt to contend with, so history is missing that ingredient. >> inflation is the thing they are aiming at right now. >> they are not going to hike enough to slow inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: the cat lobby is so powerful. just to be clear, i really like them. it is tom that is a little bit scared of them. have we cleared that up? i think we have. om